Naira strengthens amid low FX turnover

Naira, Nigeria’s currency on Friday recovered from Thursday’s loss, gaining 0.52 percent amid low dollar supply at the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange market.

The daily foreign exchange market turnover declined by 78.16 percent to $48.67 million on Friday from $222.84 million recorded on Thursday.

After trading on Friday, Naira/dollar exchange rate closed at N427.75/$ compared to N425.75 closed on Thursday at the I&E window, data obtained from the FMDQ indicated.

Most foreign exchange market dealers who participated in the auction on Thursday maintained bids at N410.00 (low) and N444 (high).

At the parallel market, also known as the black market, the local currency depreciated by N1 to N615 per dollar (selling price) from N614 (buying price).

The persistent pressure on Naira has been attributed to increased demand for the greenback by the users amid shortage.

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Nigeria’s external reserves, which give the Central Bank of Nigeria (CBN) the muscle to defend the naira, have declined by 3.0 percent year to date to $39.25 billion as of July 4, 2022 from $40.5 billion recorded at the beginning of the year.

At the money market on Friday, the Overnight (O/N) rate remained unchanged at 14.00 percent, while the Open Repo (OPR) decreased by 0.17 percent to close at 13.83 percent as against the last close of 14.00 percent on Thursday.

The Nigerian treasury bills secondary market closed on a flat note on Friday with the average yield across the curve closing flat at 6.98 percent. Average yields across short-term, medium-term, and long-term remained unchanged at 10.00 percent, 6.59 percent, and 6.11 percent, respectively, according to a market report by FSDH research.

In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 6.53 percent. Average yields across short-term and long-term maturities remained unchanged at 7.64 percent and 5.78 percent, respectively.

FGN bonds secondary market closed on a mildly negative note on Friday, as the average bond yield across the curve cleared higher by 4 bps to close at 11.62 percent from 11.58 percent on the previous day. Average yields across medium tenor and long tenor of the curve expanded by 4 bps each. However, the average yield across short tenor of the curve declined by 1 basis point.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.